Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. GENERTEC UNIVERSAL MEDICAL GROUP COMPANY LIMITED 通用環球醫療集團有限公司 (Incorporated in Hong Kong with limited liability) (Stock Code：2666) DISCLOSEABLE AND CONNECTED TRANSACTION COOPERATION AGREEMENT IN RELATION TO RESTRUCTURING OF PANGANG XICHANG HOSPITAL THE COOPERATION AGREEMENT Reference is made to the announcement of the Company dated 31 January 2019 in relation to restructuring of Pangang Group General Hospital and Pangang Group Chengdu Hospital. The Board is pleased to announce that on 25 January 2021 (after trading hours), Hospital Investment Co., Ltd. and Xichang New Steel entered into the Cooperation Agreement in connection with the formation of the Joint Venture. Pursuant to the Cooperation Agreement, the total investment of the Joint Venture is approximately RMB345.9 million, of which Hospital Investment Co., Ltd. will contribute approximately RMB176.4 million with cash, and Xichang New Steel will contribute approximately RMB169.5 million with 100% equity of the Target Company, which is the promoter of Pangang Xichang Hospital. Upon completion of the Transaction, the registered capital of the Joint Venture will be held by Hospital Investment Co., Ltd. and Xichang New Steel as to 51% and 49%, respectively. LISTING RULES IMPLICATIONS The highest applicable percentage ratio under Rule 14.07 of the Listing Rules in respect of the Transaction on a standalone basis is more than 1% but less than 5%. However, more than one 1 of the applicable percentage ratios in respect of the Transaction, when aggregated with the Previous Transaction which was entered into on 31 January 2019 and has not been completed as of the date of this announcement, are more than 5% but none of them is 25% or more. Therefore, the Transaction, when aggregated with the Previous Transaction, constitutes a discloseable transaction of the Company under the Listing Rules and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules. As of the date of this announcement, (i) Pangang Group directly and indirectly holds approximately 46.7% equity interest in Sichuan Huankang (a subsidiary of the Company), and (ii) Xichang New Steel is a wholly-owned subsidiary of Pangang Group, thus Xichang New Steel is a connected person of the Company at the subsidiary level under Rule 14A.07 of the Listing Rules. Therefore, the Transaction constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. Under Rule 14A.101 of the Listing Rules, since (1) Xichang New Steel is a connected person of the Company at the subsidiary level, (2) the Board has approved the Transaction; and (3) the independent non-executive Directors have confirmed that (i) the terms of the Cooperation Agreement are fair and reasonable; (ii) the Cooperation Agreement is on normal commercial terms; and (iii) the Cooperation Agreement is in the interests of the Company and its shareholders as a whole, the Cooperation Agreement is subject to the reporting and announcement requirements, and is exempt from the circular, independent financial advice and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. WARNING As the implementation of the Cooperation Agreement is subject to various terms and conditions, the Cooperation Agreement and the Transaction may or may not proceed at all or in a timely manner. Shareholders and potential investors should exercise caution when dealing in the Shares. 2 INTRODUCTION Reference is made to the announcement of the Company dated 31 January 2019 in relation to restructuring of Pangang Group General Hospital and Pangang Group Chengdu Hospital. The Board is pleased to announce that on 25 January 2021 (after trading hours), Hospital Investment Co., Ltd. and Xichang New Steel entered into the Cooperation Agreement in connection with the formation of the Joint Venture. Pursuant to the Cooperation Agreement, the total investment of the Joint Venture is approximately RMB345.9 million, of which Hospital Investment Co., Ltd. will contribute approximately RMB176.4 million with cash, and Xichang New Steel will contribute approximately RMB169.5 million with 100% equity of the Target Company, which is the promoter of Pangang Xichang Hospital. Upon completion of the Transaction, the registered capital of the Joint Venture will be held by Hospital Investment Co., Ltd. and Xichang New Steel as to 51% and 49%, respectively. THE COOPERATION AGREEMENT The principal terms of the Cooperation Agreement are summarized as below: Date 25 January 2021 Parties (1) Hospital Investment Co., Ltd., and (2) Xichang New Steel As of the date of this announcement, Hospital Investment Co., Ltd., Pangang Group and Pangang Mining (a subsidiary of Pangang Group) directly holds 53.30%, 46.26% and 0.44% equity interest, respectively, in Sichuan Huankang (a subsidiary of the Company). Xichang New Steel is a wholly-owned subsidiary of Pangang Group. Capital Contribution Pursuant to the Cooperation Agreement, the total investment to be made into the Joint Venture is approximately RMB345.9 million, of which Hospital Investment Co., Ltd. will contribute approximately RMB176.4 million with cash, and Xichang New Steel will contribute approximately RMB169.5 million with 100% equity of the Target Company. Upon completion of the Transaction, the registered capital of the Joint Venture will be held by Hospital Investment Co., Ltd. and Xichang New Steel as to 51% and 49%, respectively. Within ten business days after the Joint Venture obtains its business license, Xichang New Steel will make its capital contribution to the Joint Venture, including completing the registration of the 100% equity interest of the Target Company under the name of the Joint Venture, transferring the operation and management right of the Target Company and completing other procedures. 3 Within ten business days after Xichang New Steel completes all of its capital contribution obligation under the Cooperation Agreement, Hospital Investment Co., Ltd. will make its one-off cash contribution to the Joint Venture. The amount of the capital contribution to be made by each of Hospital Investment Co., Ltd. and Xichang New Steel was arrived at after arm’s length negotiations among the Parties having taken into account, among others, the expected capital requirements of the Target Company, the valued net assets to be injected, their respective intended equity interest in the Target Company and the relevant PRC laws and regulations. There is no original acquisition cost of the Target Company or Pangang Xichang Hospital to Xichang New Steel as the Target Company was established by Xichang New Steel, and Pangang Xichang Hospital was established by Pangang Group. Principal Activities of the Joint Venture After the establishment of the Joint Venture, it will become the sole shareholder of the Target Company, which is the promoter of Pangang Xichang Hospital. The Joint Venture will be primarily engaged in health management, consultancy services in healthcare, caring services and corporate management. Corporate Governance The Joint Venture will have a board of five directors, two of which shall be nominated by Xichang New Steel, and three of which will be nominated by Hospital Investment Co., Ltd. The candidate of the chairman of the board of the Joint Venture will be recommended by Xichang New Steel and elected by a majority of the board members of the Joint Venture. The candidates of the general manager and the financial control of the Joint Venture will be recommended by Hospital Investment Co., Ltd. and Xichang New Steel, respectively. In addition, the Joint Venture will have a supervisory committee of three supervisors, one candidate of which will be recommended by Xichang New Steel, one candidate of which will be recommended by Hospital Investment Co., Ltd., and one candidate of which will be elected on employee-representatives’ conference of the Joint Venture. The directors, supervisors and general manager of the Joint Venture will have a term of office of three years subject to re-election. Financial Information of Pangang Xichang Hospital and Xichang New Steel As the operating assets to be injected into the Joint Venture by Xichang New Steel, according to Pangang Xichang Hospital’s audited financial information of for the year ended 31 December 2019 and unaudited financial information for the year ended 31 December 2018 prepared in accordance with General Accepted Accounting Principles of the PRC (中國企業會計準則), Pangang Xichang Hospital recorded an annual income of approximately RMB111.5 million and approximately RMB90.8 million for the year ended 31 December 2019 and 2018, respectively. According to the applicable PRC laws, Pangang Xichang Hospital is a not-for-profit legal entity, which is not subject to corporate income tax. Pangang Xichang Hospital recorded a net profit of approximately RMB9.8 million and approximately RMB8.2 million for the year ended 31 December 2019 and 2018, respectively. As of 31 July 2020, the book value of Pangang Xichang Hospital was approximately RMB63.2 million. 4 The Target Company was established by Xichang New Steel in July 2020. As of 31 July 2020, the book value of Xichang